Similar to life insurance or car insurance, your home is a precious space where you would want to get protected with a home insurance as it is also one of the highest cost expenses you have made in your life. Often, many refuse the commitment of a home insurance when purchasing a property, which does not safeguard it against any damage. So, if you’re new to home insurance, here’s a guide to the basics!
What is home insurance?
Home insurance covers two components: the building insurance and the content insurance.
Building insurance is meant to protect the brick and mortar component of the building. Contents insurance protects your belongings housed in the building from loss due to theft and damage.
What is the point of a home insurance?
To put it simply, your home is not just walls and paint but also a space that you associate with love, security and comfort. Therefore, it is extremely crucial that you take measures to mitigate any damage that’s caused to your prized property. This is when a home insurance comes in handy.
Is it essential for you to have home insurance?
Having a home insurance policy in place ensures that you will have financial support in the event of any property damage. If you are a homeowner, mortgage lenders might insist on you having a building coverage in place to protect your investment.
Is it mandatory for you to get buildings insurance through your mortgage provider?
Definitely not, unless your mortgage clause demands it. With the wealth of information available online, you can search, compare, and get quotes from multiple insurers before setting your heart on a suitable policy. Different policies offer different features and benefits, and the trick is to keep comparing. Remember to carefully read through all of the associative documents to know everything about your chosen home insurance policy. This will prevent any unwanted surprises from occurring when raising claims.
What factors can affect a homeowner’s insurance premiums?
The following factors can affect your homeowner’s insurance premium:
1. Features and characteristics of your home – Factors such as the age of your house, the type of structure, wiring, roof, and garage can affect your premium. Older homes often cost higher to insure. The costs can also differ depending on whether the home is made of brick, stone, or if they have synthetic siding.
2. Location – Your home insurance rate can be affected if your home is in close proximity to a fire station; exposed to extreme weather conditions such as hurricanes, tornadoes or earthquakes; or located in a neighbourhood more prone to theft.
3. Presence of protective devices – If your home is secured with burglar alarm systems, smoke detectors, fire extinguishers, sprinkler systems and deadbolt locks; it can lower your home insurance premium.
4. Claims history – If you have an extensive history of claims on your previous insurance policy, you might end up paying a higher premium.
Important note
Like any other financial document, your home insurance requires special attention. Don’t overlook the terms and conditions stated in your policy document. Be it choosing between getting your gadgets and high-end appliances covered or, just protecting your walls against fire and floods; always remember to read the document carefully to verify if the insurance coverage you have opted for matches your needs.
This article was originally published on bankbazaar.com and re-published on www.squarerooms.com.sg with permission.
